There is a lot of talk about marketplaces, platforms that especially in recent years have become increasingly important and recognised for online shopping.
But, to understand more, let us start with the main question.
WHAT EXACTLY IS A MARKETPLACE? AND HOW DOES IT WORK?
A ‘marketplace’, commonly regarded as a physical place of exchange, ‘is an online platform that a company makes available to other companies for the marketing of its goods and services, against payment of a commission on sales or a membership fee, and that collects offers from multiple sellers and proposes them to potential customers’.
So the marketplace is basically a website that connects sellers and buyers, in the same way as a department store, but in a much broader way, being able to accommodate a much larger number of sellers and, therefore, of different products.
What is the difference between eCommerce and marketplace?
An eCommerce is commonly a platform that sells the products and services of a single brand, which belongs to a single company whose owner is responsible for the entire related activity; e.g. online sales, human resources managing the online store, inventory, are his responsibility, as is the entire management and budget for site development and marketing (ADV campaigns, SEO).
Thus, eCommerce is commonly considered the ‘online shop’ of the brand.
The marketplace, on the other hand, hosts several online shops of different brands or companies, thus collecting offers from several sellers and proposing them to potential customers, who have a wide choice of purchases.
The marketplace operator does not have its own inventory, but coordinates the inventories and activities of the sellers. The online marketplace platform collects offers from multiple sellers and proposes them to potential customers.
Which are the most important marketplaces in Europe?
The most important marketplace that everyone knows is clearly Amazon, a generalist marketplace that operates worldwide and in Europe.
But there is not only Amazon: more and more regional marketplaces are emerging in the various European states.
For example, France, which historically is among the first to have developed eCommerce and online sales in Europe, has many marketplaces, including CDiscount, which sells everyday products, high-tech, and household appliances, ManoMano, focused on do-it-yourself, home and gardening, La Redoute, a leader in the home and fashion categories, Rue du Commerce, a leader in house tech and home equipment.
And that’s not all: in the Netherlands the most popular marketplace is Bol.com, in Poland it is Allegro, the market leader selling Automotive, Fashion, Home and Garden and Electronics, in Germany Kaufland, the German retail giant with a digital version.
These are just a few of the more than 100 marketplaces that exist!
Why are marketplaces becoming so important?
According to the Casaleggio Associati report, globally, users accessing the Internet grew by an additional 98 million by 2022, bringing digital coverage to 64%, with 5,16 billion people connected mainly with mobile devices.
In addition, there is a significant development of mobile in countries such as Africa and Asia, where it has become the main channel for online connections probably due to lack of infrastructure.
The eCommerce market is estimated to grow by 10% in 2023 compared to 2022, exceeding 6 trillion in sales. In particular, analysing the data from Italy, the value of eCommerce turnover is estimated to grow by 18.58% annually in 2022.
The estimated growth in the online market makes it clear that these platforms, the marketplaces, are destined to become increasingly important and the main channel for online exchange/sales.
Indeed, they offer innumerable benefits to both sellers (access to millions of consumers, expansion of business into other geographical areas,…) and buyers (wide choice of products, advantageous prices,…).
Selling on marketplaces is today a necessary condition if you want to grow (with) online.